Jailbreak

Cydia

geohot has released his tool blackra1n to jailbreak 3.1.2 for ALL devices. This is a windows only release for now. iPod Touch 3rd generations must have their device plugged in and have to run blackra1n on every boot (tethered).

DO NOT USE THIS TOOL IF YOU NEED AN UNLOCK. THIS REQUIRES YOU TO RESTORE TO 3.1.2 PRIOR TO USING, WHICH WILL UPGRADE YOUR BASEBAND!

Take heed people.
Warning 3g and 3gs unlockers, do not upgrade to 3.1.2 using iTunes if you want to keep your unlock. Baseband cannot be downgraded. Check out the dev team's offerings. Also blackra1n doesn't hacktivate.

UPDATE: NetMage created afc2add to take care of adding the service for you. It's available on Cydia and is hosted by MMi. Thanks Bro!

blackra1n doesn't patch the services.plist. You will have to do it manually to get usb browsing back.

SSH into your phone and navigate to /System/Library/Lockdown/Services.plist

Copy Services.plist (copy the original for backup) to your computer and open it in a plist editor or a text editor. Add the following info:

Paste the following key/dict combo above the line that reads
<key>com.apple.crashreportcopy</key>